26
practice examMultiple Choice

Practice Exam

Question 26 • Financial Math

Choose the method of pay that would result in the most earnings for one month on sales of 73 dollars comma 620

Answer
A
Straight commission of 6 percent on all sales.
B
Monthly salary of 3 dollars comma 000 plus 2 percent commission on all sales.
C
Graduated commission of 4 percent on the first 50 dollars comma 000 in sales and 9 percent on anything over that.
D
Graduated commission of 5 percent on the first 35 dollars comma 000 in sales and 7 percent on anything over that.

Explanation

Calculate the earnings for each plan using $73,620 in sales. Plan A pays 6% × $73,620 = $4,417.20; plan B pays $3,000 + (2% × $73,620) = $4,472.40. Plan C pays $2,000 on the first $50,000 plus $2,125.80 on the remaining $23,620, for $4,125.80. Plan D pays $1,750 on the first $35,000 plus $2,703.40 on the remaining $38,620, for $4,453.40. The highest earnings are $4,472.40, so the monthly salary plus 2% commission is best.

AI-written and checked against the verified answer.

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